This month we are pleased to have done an editorial in Liverpool’s most widely read magazine YM Liverpool, titled ‘Should you downsize because you are an Empty Nester’
To read the article in the magazine please click the below image and it will take you to the YM Liverpool website, where you can look around. Hard copies are also available around the city or from our office.
Alternatively please feel free to the article below
Should you downsize because you are an Empty Nester?
There is an expected pattern to our lives that doesn’t always prove to be true.
We’re born, we go to school and grow up, we work hard our entire lives, start a family, watch them leave home to start a family of their own, and then we downsize and move to a smaller property to enjoy our retirement.
Except this often is not the case, with adult children leaving home not always prompting a change in our own home ownership.
Recent research from Lloyds Bank has found that almost half of ‘empty nesters’ across the UK have no plans to downsize when their children have ‘flown the nest’. In fact, they found that 45% plan to stay put in their current property when the kids leave home.
Just because you are staying in your home when you become an empty nester, it does not stop the children flying the nest from having a positive impact on your life. Lloyds Bank found that nearly two-thirds of parents in this position are enjoying the newly found space (who can blame them?!) and taking joy in rediscovering their independence.
The research also found that 41% of empty nesters are better off financially as a result and do not see the benefit of a downsize. Whether or not you decide to charge rent or ‘keep’ to your adult children living at home, the cost of having more adults living under the roof can be difficult to quantify – until they move out.
Whilst many parents will ask their adult children to contribute to housekeeping costs, others choose to waive this rent so their children can save more quickly towards a deposit to buy their own home. But when the kids move out, many costs disappear overnight, resulting in the parents having more to spend on themselves.
This spare cash can be allocated to realising financial goals, such as travelling. The survey found that 31% of empty nesters are planning to travel more when their children move out and 6% hope to pursue a lifelong dream.
The newly found freedom is also beneficial for parents who are grandparents, allowing them to spend more quality time with their grandchildren. In fact, 37% of empty nesters said it allowed them to enjoy more time with their grandchildren.
One concern we hear from our clients who have adult children living at home is that, when they move out, they will not be able to enjoy their newly found status as an empty nester. If this is a concern, you might find some reassurance that only 26% said they do not enjoy being an empty nester; the vast majority do enjoy this newfound status!
Andy Mason, Lloyds Bank mortgage products director, said:
“Contrary to the belief that this time in a parent’s life is lonely, a lot of empty nesters are now enjoying life since their kids have flown the nest by being able to travel more and chase lifelong dreams.”
Gaining empty nester status could turn thoughts to a downsize to a smaller property, as you no longer need all that space and spare bedrooms. However, strong ties to the community will often mean you have no intentions of moving out of the area. Others choose to stay put because they do not need to downsize to release capital for living expenses in retirement.
For those who do decide to downsize, the financial windfall can be significant. Lloyds Bank reported that, when downsizers move from a detached three-bedroom house to a flat or bungalow, the average amount of equity released from the property sale is £109,656.
On the subject of downsizing, we would encourage anyone considering this to factor it into their financial plan as an option to consider. Rather than charging headlong into a downsizing decision, or dismissing it entirely from your list of options, it can be reviewed sensibly from a financial perspective to understand what it would mean for your personal finances in later life.
Living in a smaller property is also likely to reduce ongoing costs, such as council tax and utility bills.
If you find yourself becoming an empty nester, please do give us a call to discuss your options and find out what this means for your personal finances.